The Business Secretary, Vince Cable, has distanced himself from a potential
law to protect British businesses from foreign takeovers.

Writing in The Sunday Telegraph for the launch of a series examining the health of British manufacturing, he says the new industrial Britain "challenges our traditional ideas about patriotism" and the country will "welcome overseas companies who work to make British manufacturing great again".

The series launches today with interviews with leaders in British industry, including the chairman of BAE Systems, Dick Olver and the former chief executive of Rolls-Royce, Sir Ralph Robins.

Mr Olver, who is also one of David Cameron's business ambassadors, backs the Government's plans to boost apprentice numbers and build relationships with new trading partners such as India, but calls for greater recognition for the defence industry. BAE employs 40,000 staff in the UK and is the country's biggest manufacturer.

"They are really happy talking about manufacturing and advanced manufacturing, but they're less happy talking about defence," he said. "But a big part of that 13pc [manufacturing contribution to GDP], along with pharmaceuticals, is defence. We are bloody good at it. Which other company exports £5bn of products? I think I would say 'More please'."

The debate about foreign takeovers was reignited earlier this month when software group Autonomy announced a £7bn takeover by US company Hewlett-Packard. Last year, the takeover of Cadbury by US food group Kraft led to demands for a "Cadbury's Law" to restrict takeovers of UK companies because of the potential loss of investment and jobs.

From September 19, the Takeover Panel will gain extra powers to police deals involving listed companies. These include bidders being named in initial announcements, which then triggers a 28-day "put up or shut up" deadline, greater transparency of fees and a greater voice for employee represenative groups.

It is understood the Government plans to see what impact the changes will have before considering further policies. Mr Cable said: "The new industrial Britain challenges our traditional ideas about patriotism. There are, of course, still great traditional British companies like Rolls-Royce. But most struggle to think of many more. And after British owners and managers ran the car industry into the ground, it was Japanese and American owner investment, management and technology which turned it around.

"Global companies can spring nasty surprises – like Pfizer in Sandwich. But Britain is proving that it is an attractive place in which to make things and we welcome overseas companies who work to make British manufacturing great again."